Accounting Basics

 Reimbursements

Creating an Expense Report in Chrome River (for employees only)


 Terms and Definitions

Accounts Payable - money a business owes to its suppliers, vendors, or creditors for goods or services bought on credit. A short-term debt that must be paid back quickly to avoid default, accounts payable shows up as a liability on an organization’s balance sheet. 

Accounts Receivable - money owed to a business, typically by its customers, for goods or services delivered

Accounting Period - the span of time in which a set of financial statements are released. 

Accruals - A type of record-keeping adjustment; recognize businesses’ expenses and revenues before exchanges of money take place. Accruals include expenses and revenues not yet recorded in companies’ accounts. 

Assets - Assets are resources with economic value which companies expect to provide future benefits; Asset types include fixed, current, liquid, and prepaid expenses. Assets may include long-term resources like buildings and equipment. 

Balance Sheet - financial statements providing snapshots of organizations’ liabilities, assets, and shareholders’ equity at specific moments in time. “Assets = Liabilities + Equity.”

Capital - a person’s or organization’s financial assets; may include funds in deposit accounts or money from financing sources. 

Cash Flow - Cash flow is the total amount of money that comes into and goes out of a business; net cash flow refers to the sum of all money a business makes

Chart of Accounts - An index of the financial accounts in a company’s general ledger; provides a snapshot of all the financial transactions a company has conducted in a specific accounting period. 

Credit -accounting entries that either increase an equity or liability account or decrease an expense or asset account.

Debit - either increase expense or asset accounts or decrease equity or liability accounts.

Depreciation - The depreciation accounting method determines the decreasing value of a tangible asset over its lifetime. 

Expenses - Expenses refer to costs of conducting business. 

Equity - the amount of money left over and returned to shareholders after a business sells all assets and pays off all debt, represented by the equation “Equity = Assets – Liabilities.” 

General Ledger - used to record financial transactions and data for companies. Employed by companies that use double-entry bookkeeping, general ledgers include debit and credit account records.

Gross Profit - the profit businesses make after subtracting the costs related to supplying their services or making and selling their products. 

Journal Entry - refers to a business transaction recorded in a business’s general ledger. 

Overhead - refers to the ongoing costs of doing business, other than those related to directly creating a good or service. 

Payroll - the total compensation a company pays its employees for a specific time period. 

Return on Investment (ROI) - measures the efficiency of an investment, including the amount of return on an investment relative to its cost. 

Revenue - also called sales, is the gross income a business makes through normal business operations. To calculate sales revenue, multiply sales price by number of units sold. 

Variable Cost - Variable cost refers to expenses that change depending on the level of a business’s production.